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#Bad debts expense how to#

Step 2 - Applying the bad debt Adjustment Note The window below shows the creation of a bad debt Adjustment Note. (for HK version, GST tax is not applicable)Īs this will affect your CST reporting, you may need to forward a copy of this Adjustment Note on to the customer. You may need to reference the original invoice(s) to determine which GST code to use. In the Amount field, enter a negative value equal to the bad debt amount.When you do, you will receive a warning message that says that the account used to allocate a sale is usually an income account. Select the Bad Debts expense account in the Acc# field.Enter an appropriate description such as Bad debt.

Click the Layout button along the bottom of the sales entry screen.

Use the Memo field to record the purpose of the transaction.

Select the Customer and enter the transaction details including the Invoice Number, Date and Memo.

Step 1 - Creating the bad debt Adjustment Note This bad debt Adjustment Note is then applied to the outstanding invoice(s).

Give the account a unique number that suits your account list.Ī bad debt is applied to a customer's account by first creating a credit note (GST Adjustment Note).

Go to the Accounts command centre and click Account List.

Setting up your Accounts List to record a bad debtĬreating a Bad Debts expense account is the only preparation needed for recording bad debts.

#Bad debts expense how to#

This support note explains how to do this so that the customer's outstanding balance is removed, your expenses are correctly updated and any CST liability related to the sale is adjusted.īad debts are a reversal of the original sale, but the transaction is allocated to a bad debts expense account. When you decide to write off a bad debt, you need to reflect this in your MYOB company ﬁle.